VICKY APARTMENT CO OP HSG SOC LTD. v. MOTIRAM TOLARAM AND ORS

September 2023, this Court has directed that the Writ Petition will be heard finally at the admission stage.

3. By the present Writ Petition filed under Article 227 of the Constitution of India, challenge is to the legality and validity of the Order dated 11^thApril 2018 passed by the District Deputy Registrar of Co-op. Societies, Mumbai-1 City alias Competent Authority ("Competent Authority"), by which Deemed Conveyance Application filed by the Petitioner is dismissed.

4. Mr. Kamdar, learned Senior Counsel raised following submissions:

(i) It is well settled that under Section 11 of the Maharashtra Ownership of Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 ("MOFA"), the Competent Authority is bound to grant conveyance in accordance with the terms of the Agreement which is executed between the Promoter and flat purchaser ("MOFA Agreement").

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(ii) Clause Nos.16, 20, 36 and 19 of the MOFA Agreement are important which contemplate execution of conveyance in favour of the Society.

(iii) He submitted that there are several alternatives possible under the various clauses of the MOFA Agreement. However, he states that Sub-Clause (d) of Clause 20 of the Agreement specifically provides for execution of conveyance.

(iv) He submitted that the Promoters entered into Agreements with the flat purchasers in or about 1985, the plans were sanctioned on 10^thFebruary 1984, construction of building was completed in 1987, Occupation Certificate was issued on 1^stJune 1987, possession of the flats have been handed to the respective flat purchasers in 1987 and the Society is registered on 10^th February 1989.

(v) He submits that as per the provisions of Section 11 MOFA Act read with Rule 9 of the Maharashtra Ownership Flats (Regulation of the Promotion Of Construction, Sale, Management And Transfer), Rules 1964 ("MOFA Rules"), the Promoter is under

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statutory obligation to execute the conveyance within four months from the date of registration of the Society or within the time limit as prescribed in the Agreement. He more particularly relied on Clause No.20(d) of the Agreement and submits that the Respondent Nos.1 and 2 i.e. the Promoters have failed to perform statutory duty of execution of conveyance for more than 35 years.

(vi) He submitted that the Order rejecting Deemed Conveyance Application by the Competent Authority on the ground that Respondent Nos.1 and 2 have shown readiness to convey land admeasuring 953.61 sq. mtrs. is perverse as the same is contrary to the terms and conditions of the Agreement. He submits that the said area of 953.61 sq. mtrs. is the plinth area of the Petitioner- Society building. He submits that the offer of the Respondent Nos.1 and 2 to execute conveyance only of 953.61 sq. mtrs. does not take into consideration compound of the building as well as ingress and egress of the said land. He submitted that the Agreement specifically mentioned in the I^stSchedule, the land to be conveyed in favour of the Petitioner-Society and as far as Second Schedule is concerned, the same is reserved for the other development by the Promoter. He submitted that the Petitioner is entitled for the

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conveyance in accordance with the terms of the Agreement. He submitted that the reliance of Respondent No.1 on the Area Certificate issued by their Architect, which is at Page 118 of the Writ Petition compilation, by which it is stated that the Petitioner- Society is entitled for only 953.61 sq. mtrs. area, is contrary to the terms of the Agreement.

(vii) He relied on Judgment of the Supreme Court, in the case of Jayantilal Investments v. Madhuvihar Co-operative Housing Society and Others¹, and submitted that the builder is bound to disclose in terms of Section 4 of MOFA Act of the buildings which are proposed to be constructed at the time of execution of the Agreement. He relied on Judgment of a learned Single Judge in the case of Dosti Corporation and Ors. v. Sea Flama CHS Limited and Ors.²and more particularly on Paragraph 93 of the same.

(viii) He therefore submitted that by setting aside the impugned Order Deemed Conveyance as per First Schedule of the Exhibit - A to MOFA Agreement (Page 69) be granted.

1 AIR 2007 SC 1011

2 2016 (S)Bom CR 515

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5. On the other hand, Mr. Pankaj Sawant, learned Senior Counsel for the Respondent Nos.1 and 2 raised following contentions:

(i) At the outset, he pointed out the prayer clause in the Application filed under Section 11(3) of the MOFA Act seeking deemed conveyance. He submitted that deemed conveyance of area admeasuring 2430.6 sq. yards has been sought by the Petitioner, which is even more than the area contemplated under the MOFA Agreement.

(ii) He submitted that in the Application, it is not disclosed that the Petitioner has filed Civil Suit No.4891 of 2012 in the City Civil Court, Bombay inter alia seeking the relief of conveyance and therefore on that ground alone, the Deemed Conveyance Application should have been dismissed.

(iii) He submitted that the impugned Order is dated 11^thApril 2018 and the Writ Petition challenging the same has been filed on 24^thFebruary 2023. Thus, there is inordinate delay in filing the Writ Petition.

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(iv) He submitted that the Competent Authority has taken possible view of the matter. He pointed out the findings recorded on Page 37 by the Competent Authority to that effect that there is ambiguity in Clause Nos.16 and 36 of the MOFA Agreement.

(v) He relied on Judgment of the learned Single Judge in the case of Ganga Bhaskar Builders, Virar, Thane and Others v. Competent Authority and District Deputy Registrar, Thane and Another³, which is reflected in the impugned Order [Page 39 of the Writ Petition Compilation] and submitted that one of the factor required to be taken into consideration while dealing with the Application for Deemed Conveyance is the delay in filing the Application for Deemed Conveyance. He submitted that the Petitioner-Society is registered on 10^thFebruary 1989 and the Deemed Conveyance Application is filed in 2017 i.e. after delay of 28 years. He therefore submitted that the said factor is required to be taken into consideration by the Competent Authority.

3 (2015) SCC OnLine Bom 1081 / (2015) 4 Mah. LJ 721

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(vi) He relied on the Judgment of the Division Bench in the case of Manratna Developers, Mumbai v. Megh Ratan CHS Ltd., Mumbai & Ors.⁴.

(vii) He submitted that although it is represented by the Respondent Nos. 1 and 2 before the Competent Authority that the Respondent Nos. 1 and 2 are ready and willing to execute conveyance of 953.61 sq. mtrs., however, the Respondent Nos. 1 and 2 are ready and willing to execute conveyance in favour of the Petitioner - Society of 1208.13 sq. mtrs. area. He pointed out Page 126 of Affidavit-in-Reply filed on behalf of Respondent Nos. 1 and 2 dated 20^thDecember 2023.

(viii) He submitted that redevelopment is being undertaken as per permissions granted by the U.L.C. authorities and one of the condition as per the said permission is that the tenants are required to be allotted rehab premises.

(ix) He submitted that the Competent Authority has taken into consideration all the aspects of MOFA Agreement including the relevant clauses of the Development Agreement and passed the

4 2009 (2) Mh. L.J. 115

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Order by taking into consideration all the relevant aspects. He, therefore, submitted that this is not the case where the Competent Authority has exercised jurisdiction not vested in the Competent Authority or acted in arbitrary manner. He, therefore submitted that no interference in the writ jurisdiction is warranted.

6. Before considering the rival contentions, it is necessary to set out certain factual aspects:-

(i) The plans for the building to be constructed were sanctioned on 10^thFebruary 1984.

(ii) The MOFA Agreements were executed with the flat purchasers in or about 1985. The Clause No.20(d) of the MOFA Agreement executed with the flat purchasers is as under:-

"(d) The Promoters shall be obliged whenever required by the builders after the Co-operative society is registered or the limited company is incorporated as the case may be to transfer in favour of the Co- operative Society or Limited Company as the case may be (without demanding or charging any consideration) the interest in the said immovable property described in the First Schedule hereunder written which would be

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so obtained under the said Indenture of Lease or Deed of Conveyance as the case may be.^"

(Emphasis added)

Thus, the said clause 20(d) of the MOFA Areement executed with the flat purchasers, clearly specifies that after the registration of the Society immediately conveyance deed will be executed in favour of the Society regarding the property described in the First Schedule.

(iii) The flat purchasers have paid entire consideration to the Promoters. The construction of the building is completed in or about 1987 and the Occupation Certificate is issued for the building on 1^stJune 1987.

(iv) The flat purchasers received the possession of the respective premises in 1987 and the Society is registered on 10^thFebruary

1989.

7. In view of the above factual position, it is necessary to examine the relevant provisions of law:-

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(i) The relevant part of Section 11 of the MOFA Act is as under:

"11. Promoter to convey title, etc., and execute documents, according to agreement

A promoter shall take all necessary steps to complete his title and convey to the organisation of persons, who take flats, which is registered either as a co-operative society or as a company as aforesaid, or to an association of flat takers [or apartment owners] his right, title and interest in the land and building, and execute all relevant documents therefor in accordance with the agreement executed under section 4 and if no period for the execution of the conveyance is agreed upon, he shall execute the conveyance within the prescribed period and also deliver all documents of title relating to the property which may be in his possession or power."

(Emphasis added)

(ii) Relevant part of Rule 9 of the MOFA Rules is as follows:-

"9. Period for conveyance of title of promoter to organisation of Flat purchasers

If no period for conveying the title of the promoter to the organisation of the flat purchasers is agreed upon, the promoter shall (subject to his right to dispose of the remaining flats, if any) execute the conveyance within four months from the date on which co-operative society or the company is registered or, as the case may be, the association of the flat takers is duly constituted."

(Emphasis added)

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Thus, it is the statutory duty of the Promoter to execute the conveyance within a period of 4 months from the date of registration of the Society or within a period as specified in the Agreement.

8. The above factual and legal position show that this is a case where the Respondent Nos.1 and 2 i.e. the Promoters were under contractual and statutory obligation to execute the conveyance in favour of the Petitioner - Society immediately on the formation of the Society or in any case within a period of 4 months from the date of registration of the Society. The Society has been registered on 10^thFebruary 1989. Thus, the Respondent Nos.1 and 2 were under statutory obligation to execute the conveyance in favour of the Petitioner - Society on or before 10^thJune 1989. Thus, the factual position on record clearly shows that the Respondent Nos.1 and 2 have failed to perform their statutory as well as contractual duty of execution of conveyance in favour of the Petitioner-Society for last 35 years.

9. It is required to be noted that the Competent Authority has dismissed the Deemed Conveyance Application on the ground that

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although the Respondents have no objection for execution for passing Order of deemed conveyance, however, there is dispute regarding the area, which is required to be conveyed in favour of the Petitioner-Society. It is stated in Paragraph 7 of the impugned Order (Page 34) that the Respondents i.e. the Promoters are ready and willing to execute conveyance of an area admeasuring 953.61 sq.mtrs., however, as the terms of the Agreements are unambiguous, the Deemed Conveyance Application is rejected. The reason given by the Competent Authority is that as the Promoters are ready to execute conveyance of said area, it cannot be said that the Promoters are not ready and willing to execute the conveyance. Thereafter the Competent Authority has discussed about the plans and Clause Nos.15, 16, 20 and 36 of the MOFA Agreement. The Competent Authority has observed that the cumulative effect of all these clauses is that the conveyance is to be executed after the Society is registered and after all the flats are sold. It is further observed that there is ambiguity in Clause Nos. 16 and 36. The Competent Authority has also relied on certain Judgments and also mentioned that 953.61 sq. mtrs. area can be allotted and concluded that only the land admeasuring 953.61 sq. mtrs. can be

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conveyed in favour of the Petitioner-Society. Inspite of the same, entire Deemed Conveyance Application is rejected.

10. As far as the First and Second Schedules of the MOFA Agreement executed with the flat purchasers are concerned, the Competent Authority has stated on Pages 43 and 44, as under:

" gs o.kZu fopkjkr ?ksrys vlrk 7398-89 LDOskvj ehVj ¼8849 LDOskvj ;kMZ½ iSdh 1672-25 LDOskvj ehVj ¼2000 LDOskvj ;kMZ½ ;k tkxk vlY;kps ;ke/;s o.kZu vkgs- rlsp] nql&;k ifjf'k"Vke/;s 360-03 pkS-ehVj ¼430-60 LDOskvj ;kMZ½ tkxk 7398-89 pkS-ehVj tkxsiSdh vlY;kps o.kZu vkgs- djkjkP;k mís'k Hkkxke/;s ekyeRRskps o.kZu gs QMds ;kauh fnysY;k izek.ki=ke/;s vlY;kps uewn dsys vkgs- QMds ;kaP;k izek.ki+=krhy o.kZukP;k ,df=r Hkw[akMkps x.ku dsY;kl 2032-28 pkS- ehVj v'kh ekyeRrk r;kj gksbZy- vtZnkjkus vkiyh ekx.kh gh 2032-28 pkS- ehVj vfHkLrkarj.k d:u ns.;kph fouarh dsyh vkgs- ijarw djkjke/;s lnj ekyeRrk gLrkarj.kkckcr djkjkrhy eqÌk dzekad 16 ph rjrwn ikgrk lgdkjh laLFksP;k ukokus 11 o"kkZP;k eqnrhps :i;s 250@& izrh efguk HkkMsdjkjkus vkf.k T;ke/;s ;k lgdkjh laLFksl izr;korhZ vf/kdkj [kjsnh dj.;kph vlrhy v'kk rjrwnhps dye vkgs- izR;korhZ vf/kdkj 40000 :i;s ekscnyk nsÅu lgdkjh laLFkk [kjsnh d:

'kdsy v'khgh rjrwn vkgs- ;k rjrwnhpk fopkj djrk ,drQhZ vfHkLrkarj.k d:u ns.ks ;k djkjkrhy rjrwnhaps nqyZ{k d:u ;k izkf/kdj.kkus vkns'k ns.ks ojhy U;k;k/kkj ikgrk ,drQhZ vfHkLrkarj.kkpk vkns'k ikfjr dj.ks ;ksX; gks.kkj ukgh-Þ (Emphasis added)

English translation of the above is as follows:-

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"On taking this description in to consideration, it is found that there is a description of the land admeasuring 1672.25 sq.mt. (2000 square Yards) from out of the land admeasuring 7398.89 sq.mt. (8849 square yards). Similarly, in another Schedule, there is a description of the land admeasuring 360.03 sq.mt. (430.60 sq.yards) from out of the land admeasuring 7398.89 sq.mt. It is mentioned that the description of the property mentioned in the Preface portion of the Agreement, is as per the description mentioned in the Certificate issued by Phadke. If the area of the consolidated plot description of which has been mentioned in the Certificate issued by Phadke, is taken into consideration, then, the said property becomes the property of the area admeasuring 2032.28 sq.mt. The Applicant has requested to make conveyance of the property admeasuring 2032.28 sq.mt. However, on perusing the provision mentioned in Clause No. 16 of the Agreement in respect of the conveyance of the said property, it is seen that in the said clause, it has been mentioned that the property has been given in favour of the Co-operative Society, on lease rent at the rate of Rs.250/- per month for the term of 11 years and that the Society will have right to purchase the same by way of reversionary right. Moreover, there is also a provision in the said clause that the Co-operative Society may purchase the same by way of reversionary right by paying consideration of Rs.40,000/-. Considering the aforesaid provision, it would not be appropriate on the part of this Authority to pass an order to make conveyance ex-parte by disregarding the provisions in the said Agreement and therefore, considering the basis of the aforesaid provisions, it would not be appropriate to pass order to make conveyance ex-parte."

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By giving above reasons, the Competent Authority has dismissed the Application for Deemed Conveyance.

11. To examine the correctness of the reasons given by the Competent Authority, Clause Nos.16, 19, 20 and 36 of the MOFA Agreement are required to be taken into consideration. The Schedule of the property i.e. First and Second Schedules, which are contained in the Title Certificate issued by V.A. Phadke & Co. Advocates, Solicitor and Notary is also required to be taken into consideration. The MOFA Agreement specifically mentioned about the First and Second Schedules, which are mentioned in Title Certificate issued by V. A. Phadke & Co. Advocates. Said Clause Nos.16, 19, 20, 36 and the First and Second Schedules read as under:

"16. The Builders shall execute in favour of the Co- operative Society to be formed as aforesaid. or lease for term of 11 years at the monthly ground rent of Rs. 250, the lease-hall also inter-alia contain an option reserved in favour of Lessees i.e. the Co-operative Society to purchase reversionary rights of the Lessors i.e. the Builder for a lumpsum consideration of Rs. 40,000/- (Rupees Forty thousand only). The draft of the proposed deed of lease to be executed in favour of the Co- operative Society has already been seen and approved by the Purchasers. Since the aforesaid lease is to, interalia, contain an obligation as and by way of condition on the

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part of the lessees to purchase from the lessor the Revisionary interest of the lessor of the said land described in the First Schedule hereunder written at or for the lumpsum price of Rs. 40,000/-and/on the terms and conditions contained in the said Indenture of lease, the purchaser shall contribute his/her proportionate amount of the consideration or purchase price and stamp duty for purchasing such reversion viz a lumpsum of Rs. 5,000/- (Five Thousand Only). The purchaser shall be obliged to make such payment to the Builders within seven days of the Builders calling upon the purchaser to pay the said amount."

" 19. The purchaser hereby covenants with the Builders to pay all the amounts required to be paid by the Purchaser under this Agreement and to observe and perform the covenants and conditions contained in this Agreement and the leasy Conveyance to be executed in favour of the Co-operative Housing Society or an incorporated body in respect of the said piece or parcel of land more particularly described in the Schedule hereunder written and the building thercon and to keep the Builders indeminfed against the said payment and observance and performance of the said covenants and conditions except so far as the same ought to be observed by the Builders.

20. If the builders so decide the builders shall be entitled to obtain (even prior to the registration or incorporation of the Co-operative Society or limited company, as the case may be) as Indenture of Lease and/or a Deed of Conveyance as the case may be in respect of the said land described in the First Schedule hereunder written, in favour of one or more persons who have taken and who may take from the builders flats or other portions in such new build-ing/s known as 'VICKY APARTMENTS'. If the builders so exercise their right reserved to them under this clause, the person or persons in whose favour the Indenture of Lease or Deed of Conveyance is obtained (hereinafter referred to as "the

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Promoters") shall be bound by the undermentioned conditions and provisions, and suitable provisions for the same shall also be contained in the Indenture of Lease or the Deed of Conveyance as the case may be.

(a) The Promoters shall be obliged to transfer the immoveable property (so demised or conveyed in their favour under such Deed of Lease or Conveyance as the case may be) in favour of the builders if any of the purchasers who have taken and/or who take on ownership basis from the builders the flats, shops and/or other portions in the aforesaid buildings, fail to pay as per the printed ownership Agreement, the consideration money in full payable by the flat holders concerned to the builders and further that till such time the promoters shall hold such immoveable property with themselves and shall not transfer it to any such incorporated body.

(b) Though the builders granting such Indenture of Lease or Deed of Conveyance in favour of the Promoters; the builders shall be entitled to retain possession of the said immoveable property described in the First Schedule hereunder written and to continue with the development thereof and to complete the said building/s and structures as planned by the builders and that till the time the builders recover in full all their dues from the flat holders who have taken or who may thereafter take the flat/shop and other portions in the said building/s the builders shall have the first and paramount charge and lien on the said immoveable property described in the First Schedule hereunder written and on the said building/s and further that the builders shall be entitled to retain possession of the said immoveable property and the said building/s till the time all their dues aforesaid are received by the builders in full.

(c) Though the builders granting such Indenture or Lease or Deed of Conveyance in fayour of the promoters, the builders shall be entitled to continue to sell on

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ownership basis the unsold flats/shops and other portions in thie said building/s as also to recover and receive from the flat holders who have taken or who may thereafter take from the builders on ownership basis the flats/shops and other portions of the said building/s the full consideration in respect of the flats, shops and other portions of the said building/s and the obtaining of such Indenture of Lease or Deed of conveyance shall nor in any manner affect the rights and remedies of the builders under the printed ownership agreement the intention being that all such rights and remedies shall continue to be in full force and effect and that the obtaining of the said Indenture of Lease or Deed of Conveyance shall without prejudice to such rights and remedics of the builders.

(d) The Promoters shall be obliged whenever required by the builders after the Co-operative society is registered or the limited company is incorporated as the case may be to transfer in favour of the Co-operative Society or Limited Company as the case may be (without demanding of charging any consideration) the interest in the said immoveable property described in the First Schedule hereunder written which would be so oblained under the said Indenture of Lease or Deed of Conveyance as the case may be."

"36. After the building is complete, ready and fit for occupation and after the Society or limited Company or Incorporated body is registered and only after all the flats in the said building have been sold and disposed of by the Builders and after the Builders have received all dues payable to them under the terms of the Agreement with various flats holders, the Builders will execute and/or cause to be executed a Deed of Lease, Conveyance and/or other document in favour of a Co- operative Society. Limited Company or an Incorporated Body."

"SCHEDULE ABOVE REFERRED TO :

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FIRSTLY: All that piece or parcel of land or ground of Pension and Tax Tenure with the structures standing thercon situate at Old Prabhadevi Road in the Registration Sub-District of Bombay and in the Town and Island of Bombay admeasuring 2000 square yards or thereabouts forming part of a larger piece of land admeasunng 8849 sq. yds. or thereabouts described in the First Schedule above written and registered in the books of the Collector of Land Revenue under New No. 1656 and Cadastral Survey No. 1/43 of Mahim Division and assessed by the Assessor and Collector Bombay Municipality under G Ward Nos. 2606, 2608(2) and 2610(9) and Street Nos. 434A, 73A and 434C and bounded as follows: that is to say: on or towards the East and South by the property of Peter Luis, on or towards the West by Public Passage and on or lowards the North by the property of Bombay Dying and Spinning Mills (Tata Printing Press).

SECONDLY: ALL THAT piece or parcel of land or ground of Pension and Tax Tenure with the structures thereon situate at Old Prabhadevi Road in the Registration Sub- District of Bombay and in the Town and Island of Bombay admeasuring 430.60 square yards or thereabouts forming part of a larger piece or land admeasuring 8849 square yards or thereabouts described in the Ist Schedule above written and Registered in the books of the Collector of Land Revenue under New No. 1656 and Cadastral Survey No. 1/43 of Mahim Division and assessed by the Assessor and Collector Bombay Municipality under "G" Ward Nos. 2606 2608(2) and 2610 (9) and Street No, 434A. 73A and 434 BC and bounded as follows :— that is to say; on the East and South by the property of Peter Luis; on the West by the property of the Vendors agreed to be sold to the Purchasers and on the North by the property of Bombay Dying and Spinning Mills. (Tata Printing Press)."

12. All these clauses namely Clause Nos. 16, 19, 20 and 36 clearly show that they operate at different stages of the

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development. As far as the stage when the Deemed Conveyance Application is filed, the applicable clause is Clause No.20(d). Although the Competent Authority in the impugned Order has quoted various clauses of the MOFA Agreement including above clauses, however, has not considered Clause 20(d). Clause No.20(d) of the MOFA Agreement clearly provides for execution of conveyance after registration of the Society. The said Clause No.20(d) specifically provides that the conveyance is to be executed with respect of land described in First Schedule. It is admitted position that the said "First Schedule" is mentioned in the Title Certificate issued by V. A. Phadke & Co.. The First Schedule specifically mentions an area admeasuring 2000 sq yards i.e. 1672 sq. mtrs.. Thus, the Respondent Nos.1 and 2 are duty bound to execute the conveyance in favour of the Petitioner - Society for the land as more particularly set out in the First Schedule. In this behalf, it is also required to be noted that the Respondent Nos.1 and 2 before the Competent Authority have taken a stand that they have no objection if the Deemed Conveyance in favour of the Petitioner - Society is granted to the extent of area of 953.61 sq. mrs. and in this Writ Petition by filing Affidavit-in-Reply, the Respondent Nos.1 and 2 have shown readiness to execute the

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conveyance of area of 1208.13 sq. mrs. (Page 127 - Architect Certificate). Thus, the entitlement of the Petitioner - Society to get executed conveyance in their favour is admitted. Thus, the Competent Authority erred in relying on Clause No.16 of the MOFA Agreement to deny the relief to the Petitioner - Society. As per the MOFA Agreement and description of the property as per "First Schedule" of the Title Certificate, the Petitioner - Society is entitled to get Deemed Conveyance of area of 2000 sq. yards. i.e. 1672 sq. mrs.

13. There is substance in the contention raised by Mr. Sawant, learned Senior Counsel for the Respondent Nos. 1 and 2 that the Society has sought more area in the Deemed Conveyance Application than their entitlement. However, the same cannot be an impediment for the Competent Authority to grant lesser area to the Petitioner.

14. Mr. Kamdar, learned Senior Counsel for the Petitioner relied on the Judgment of learned Single Judge in the case of Acme v. Deputy Registrar and Others.⁵. In the said Judgment, a learned

5 2023 SCC OnLline Bom 110

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Single Judge has discussed the scope of various provisions of MOFA Act and Rules. The relevant discussions in Paragraphs 19 to 24, 30 and 31, read as under:-

"19. "A brief recourse to the provisions contained in the MOFA, 1963 and the MOFA Rules, 1964 would be in order. The MOFA, 1963 came to be enacted with the avowed object of regulation of the promotion of the construction, sale and management and transfer of flats taken on ownership basis as it was found that consequent to actuate shortage of housing in the several areas of the State sundry abuses and malpractices were being indulged in and difficulties were faced in sale, management and transfer of flats taken on ownership basis. Under Section 4 of the MOFA, 1963 an obligation is cast on the promoter to enter into a written agreement for sale with each of the persons who are to take the flats in the building to be constructed by the promoter, in the prescribed format. Sub-section (1)(a) of Section 4 provides that such agreement shall contain the particulars as specified in Clause (a) and to such agreement copies of the documents specified in Clause

(b) shall be attached. Such an agreement is required to be registered under the provisions of Registration Act, 1908. Section 4(a) primarily insulates the purchasers from the consequences which entail the non-registration of an agreement under the Registration Act, 1908. Section 10 enjoins the promoter to take steps for registration of the organization of the persons who take flats as a cooperative society, or as the case may be, as a company. However, it does not affect the right of the promoter to dispose of the remaining flats in accordance with the provisions of the said Act."

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"20 Then comes Section 11. It mandates that the promoter shall take all necessary steps to complete his title and convey to the such organization his right, title and interest in the land and the building, and execute all relevant documents therefor in accordance with the agreement executed under Section 4. If there is no agreement as to the period within which the conveyance is to be executed, the promoter shall execute the conveyance within the prescribed period. Under sub- section (3) of Section 11, if the promoter fails to execute the conveyance in favour of such organization, within the prescribed period, the members of such organization may make an application in writing to the competent authority constituted under Section 5A, accompanied by true copies of the registered Agreement for Sale and all other relevant documents, for issuing a certificate that such organization is entitled to have an unilateral deemed conveyance executed in its favour and to have it registered. Under sub-section (4) of Section 11 the competent authority after making such inquiry as it deems necessary and after verifying authenticity of the documents submitted and after giving the promoter a reasonable opportunity of being heard, if satisfied that it is a fit case for issue of such certificate, shall issue a certificate to the Registrar of Assurances certifying that it is a fit case for enforcing unilateral execution of conveyance conveying thereby right, title and interest of the promoter in the land and building in favour of such organization, as deemed conveyance.

21. Under Rule 9 of the Rules, 1964 if no period for conveying title of the promoter to such organization is agreed upon, the promoter shall, subject to his right to dispose of remaining flats, if any, execute the conveyance within four months from the date on which co-operative

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society or the company is registered, or as the case may be, the association of flat takers is duly constituted.

22. Under the scheme of the Act and the Rules, it becomes evident, the promoter is enjoined to first enter into an agreement for sale of the flats in a building, register it and then take steps to form an organization of the flat purchasers and after completion of development and within the time stipulated in agreement between the parties or if no time is stipulated within four months of the organization having been registered or constituted, execute an instrument conveying the right, title and interest in the land and the building in accordance with the agreement executed with the flat purchasers.

23. The general reluctance, refusal or neglect on the part of the promoters to discharge the obligation to execute the conveyance, made the legislature to step in and enforce the obligation by empowering the competent authority to certify the justifiability of the deemed conveyance. The competent authority is thus entrusted with the responsibility to enforce the obligation of the promoter. From this standpoint, only the agency which executes the conveyance, in favour of the organization of purchasers, to which they are legitimately entitled to, stands substituted as the promoter disables himself from discharging the obligation, either by refusal or neglect.

24. The competent authority is, however, required to follow fundamental principles of judicial process. Upon verification of the authenticity of the documents and after furnishing a reasonable opportunity of hearing to the promoter it must arrive at a satisfaction that a case for execution and registration of deemed conveyance is made out."

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"30. From the above statutory provisions and enunciation, the position which emerges can be summarized as under. The authority to grant deemed conveyance is conditioned and controlled by the primary obligation of the promoter to convey to the organization of flat purchasers right, title and interest in the land and buildings, in accordance with the agreement executed under Section 4. Competent authority cannot convey more than what the promoter had agreed to convey under the agreement executed under Section 4. What competent authority is thus required to consider is, the extent of the obligation incurred by the promoter, whether the obligation to execute the conveyance became enforceable and whether the promoter committed default in, or otherwise disabled himself from, executing the conveyance.

31. The enquiry is thus of limited nature. The competent authority cannot delve into the aspects of title. Nor the finding of the competent authority precludes a party from agitating the grievance as to the entitlement of the organization of purchasers to have the conveyance, before the Civil Court. The remit of enquiry by the competent authority is, thus, whether the conditions stipulated for enforcement of the obligation to execute the conveyance have been satisfied and, if yes, order an unilateral deemed conveyance."

(Emphasis added)

15. It is well established that the authority to grant deemed conveyance is conditioned and controlled by the primary obligation of the promter to convey to the organisation of flat purchasers

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right, title and interest in the land and buildigs, in accordance with the Agreement executed under Section 4 of the MOFA.

16. It is settled legal position that the remit of enquiry by the Competent Authority is whether the conditions stipulated for enforcement of the obligation to execute the coneyance have been satisfied and, if the answer to this enquiry is yes, order an unilateral deemed conveyance. The Competent Authority cannot convey more than what the Promoter had agreed to convey under the Agreement exeuted under Section 4 of MOFA. Thus, the Competent Authority is required to consider the extent of of the obligation incurred by the Promoter, whether the obligation to execute the conveyance became enforceable and whether the Promoter committed default in, or otherwise disabled himself from, executing the conveyance.

17. This is a case where Clause No.20(d) specifically provides that the Promoter is under obligation to execte the conveyance deed immediately after registration of the Society. In this particular case, the Society is registered on 10^thFebruary 1989. Till date i.e. for last about 35 years, the Promoters have not executed

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conveyance in favour of the Society. The Competent Authority has noted that the Promoters have shown readiness to execute the conveyance only for area of 953.61 sq. mtrs.. As noted earlier in this Writ Petition on the basis of Certificate issued by the Architect (Page 126), the Respondent Nos.1 and 2 agreed to execute the conveyance for an area of 1208.13 sq. mrs. Thus, entitlement of the Petitioner - Society to get deemed conveyance is in fact admitted and the same is well established.

18. The readiness of the Respondent Nos.1 and 2 to execute conveyance in favour of the Petitioner - Society for an area of

953.61 sq.mtrs., is contrary to the MOFA Agreement. The Affidavit filed in this proceeding by the Respondent Nos.1 and 2 show that the Promoters have shown readiness to convey in favour of the Petitioner- Society the area of 1208.13 sq. mtrs. whereas the Petitioner by additional affidavit sought area of 2171.40 sq. yard i.e. 1815.63 sq. mtrs. area. However, it is required to be noted that the remit of the Competent Authority is only to grant conveyance of the area, which is mentioned in the MOFA Agreement. In the Agreement, the Promoters have agreed to convey in favour of the Society of the flat purchasers an area admeasuring 2000 sq. yards

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i.e. 1672 sq. mrs.. Although the Petitioner has sought more area, the same cannot be allotted and the fact that the Petitioner has sought more area cannot be a ground for dismissal of the Deemed Conveyance Application.

19. Mr. Sawant, learned Senior Counsel raised the contentions that the Deemed Conveyance Application filed by the Petitioner - Society in the year 2017, filed after about 23 years after the registration of the Society is required to be dismissed on the ground of delay. In fact, it is required to be noted that by Maharashtra Act No.IV of 2008, the provisions of the MOFA Act were amended, providing appointment of Competent Authority for considering application seeking Deemed Conveyance. The said Bill was introduced as L. A. Bill No.XLVII of 2002 in the Legislative Assembly. The statement of objects and reasons of said Bill are set out herein below:-

"STATEMENT OF OBJECTS AND REASONS The Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) Act, 1963 has been enacted by the Government of Maharashtra in the year 1963 to regulate for a certain

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period in the State, the promotion of the construction of, the sale and management, and the transfer of flats on ownership basis. The said Act has been enacted to effectively prevent the sundry abuses and malpractices which had been on increase, consequent upon the acute shortage of housing in the several areas of the State.

2. It has come to the notice of the Government that the objective behind enactment of the MOFA is not fully achieved and its implementation has not been effective enough to curb certain malpractices and sundry abuses by the promoters or developers of the properties. Therefore, to make provisions of the said Act more effective and to safeguard interests of the purchaser of the flats, the Government of Maharashtra considers it expedient to carry out certain amendments to the existing provisions of the said Act. The important amendments proposed to be carried out are as follows:-

(a) It is proposed to provide for appointment of one or more Competent Authorities for different local areas who would, on failure on the part of the promoter,-

(i) to form a co-operative society of the persons who have purchased the flats from the promoter, on application received from such purchasers, direct the District Deputy Registrar, Deputy Registrar or, as the case

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may be, the Assistant Registrar of Co-operative Societies to register the co-operative society of such flat owners :

(ii) to execute a conveyance within the prescribed period as provided in section 11, on receiving an application from the flat owner members of a co- operative society, issue a certificate to such society certifying that the said society was entitled to have a conveyance registered and that it is a fit case for execution of a unilateral conveyance as a 'deemed conveyance' in favour of the said society by the Registration Officer under the Registration Act, 1908.

(b) To serve as a deterrent, a provision is also being made tor disqualifying a promoter, convicted under the said Act (except under section 12A), for a period of five years so as to debar him from being granted any permission by the local authorities under the relevant laws for undertaking construction of flats.

(c) The proceedings before the Competent Authority are given the status of judicial proceedings for the purposes of sections 193 and 228 of the Indian Penal Code and every Competent Authority is to be deemed to be a Civil Court for the purpose of sections 345 and 347 of the Code of Criminal Procedure, 1973.

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3. The Bill seeks to achieve the above objectives."

20. Thus, the said provisions of giving Society right to obtain Deemed Conveyance by applying to the Competent Authority have been introduced in the MOFA Act as it was noticed that the objective behind enactment of the MOFA is not fully achieved and its implementation has not been effective enough to curb certain malpractices and sundry abuses by the Promoters or developers of the properties. Therefore, to make provisions of the said Act more effective and to safeguard interests of the purchaser of the flats, the legislature introduced certain amendments to the existing provisions of the MOFA. Thus, it is provided that application can be filed before the Competent Authority, on failure on the part of the Promoter, to form a co-operative society or to execute a conveyance within the prescribed period as provided in Section 11 and the Competent Authority then can pass appropriate Order. Thus, the Application of Deemed Conveyance cannot be rejected on the ground of delay in filing the Application for Deemd Conveyance. It is required to be noted that on failure of the Promoter to perform said statutory duty the right is created in favour of the Society to file Application before the Competent

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Authority seeking Deemed Conveyance cannot be defeated on the ground of delay when the said right is to be exercised in view of failure of the Promoter to perform his statutory duty. Mr. Sawant, learned Senior Counsel relied on the Judgment of Ganga Bhaskar Builders (Supra) in support of said contention. However, the said decision only states that various factors are required to be taken into consideration by the Competent Authority. Therefore, there is no substance in the said contention.

21. Although, there is substance in the contention of learned Senior Counsel appearing for the Respondent Nos. 1 and 2 that the Petitioner has not disclosed in the Application filed seeking Deemed Conveyance that they have already filed Suit seeking conveyance. However, it is required to be noted that during the pendency of the Deemed Conveyance Application, said Suit has already been withdrawn, by filing Application on 4^thAugust 2017, which was allowed on 1^stSeptember 2017 and the said fact was brought to the notice of the Competent Authority and thereafter the Competent Authority passed the impugned Order on 11^thApril 2018. Thus, same will have no significance in view of the subsequent events.

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22. Mr. Pankaj Sawant, learned Senior Counsel also relied on Order of the Division Bench of this Court in the case of Manratna Developer, Mumbai (Supra). However, it is required to be noted that the said Order is passed by the Division Bench in the Appeal concerning ad interim Order passed in Notice of Motion in a Suit. The observations in the said decision are not relevant as far as the present case is concerned.

23. Mr. Pankaj Sawant, learned Senior Counsel also raised the contention that the Writ Petition challenging the impugned Order dated 11^thApril 2018 has been filed on 24^thFebruary 2023 and therefore the same be not entertained. However, the Petitioner in Paragraph 19 have given the adequate explanation, which is as follows:-

"19. The Petitioner submits that due to change in the Managing Committee and due to the Covid-19 Pandemic which started from March 2020 and continued upto February, 2022, the Petitioner could not approach this Hon'ble Court earlier and delay if any, in filing the present petition may please be condoned. The Petitioner has mandatory right for conveyance of the said land in its favour. The cause of action is continuing in nature as

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the Respondent No.1 till date has not conveyed the said land in favour of the Petitioner.^"

24. This is a case where as noted herein above, the Promoters have failed to perform their statutory duty for more than 35 years. In fact, non-execution of the conveyance deed in favour of the registered Society is the offence under Section 13(1) of the MOFA Act. Section 13(1) of the MOFA inter alia provides that any Promoter who, without reasonable excuse, fails to comply with or contravenes, the provisions of Section 11 shall, on conviction, be punished with imprisonment for a term which may extend to three years or with fine, or with both is duly constituted.

25. In view of above discussions, the impugned Order dated 11^th April 2018 passed by the Competent Authority in Deemed Conveyance Application No.3 of 2017 is quashed and set aside.

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27. The Writ Petition is allowed in above terms with no Order as to costs.

28. It is required to be noted that as per the legal position, the Order granting deemed conveyance does not conclude the issue of title and parties aggrieved can file Suit for establishing the title to the property. All contentions in that behalf are expressly kept open.

29. Mr. Sawant, learned Senior Counsel seeks stay of this Order for some period. Accordingly, this Order is stayed for a period of twelve weeks.

[MADHAV J. JAMDAR, J.]

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